Business Context and Reporting Period
This Form 8-K is a Current Report filed by Digital Ally, Inc. (not Kustom Entertainment, Inc.) on June 30, 2017. The filing addresses corporate governance issues regarding the validity of shareholder votes from the 2015 and 2016 Annual Meetings concerning amendments to the Articles of Incorporation.
Key Financial Metrics
This filing is a corporate event report and does not provide financial data such as revenue, profit, cash flow, margins, debt, or liquidity. No financial metrics are disclosed in this document.
Material Changes and Corporate Actions
- Share Increase Amendment (2015): Shareholders previously voted to increase authorized Common Stock from 9,375,000 to 25,000,000. Due to questions regarding the validity of the vote, the Company will hold a Special Meeting on August 14, 2017 to ratify this amendment.
- Blank Check Preferred Amendment (2016): Shareholders previously voted to increase authorized capital to 35,000,000 shares, including 10,000,000 shares of Blank Check Preferred. The Company identified an error in the Voting Instruction Form that allowed brokers to vote on this proposal without beneficial owner instructions, violating NYSE rules.
- Rescission Plan: The Company will file documents with the Nevada Secretary of State to rescind the Blank Check Preferred Amendment.
- Issuance Status: The Company has not issued or reserved any Common Stock in excess of the original 9,375,000 shares, nor has it issued any Blank Check Preferred shares.
Outlook, Risks, and Management Commentary
Management states that the Special Meeting is necessary to eliminate uncertainty regarding the effectiveness of the 2015 Share Increase Amendment. The Company has determined that the broker votes for the 2016 Blank Check Preferred Amendment were erroneous and must be excluded, necessitating the rescission of that amendment. Shareholders are urged to read the definitive proxy statement before making any voting decisions.
Key Facts for Investor Verification
- Verify the date and agenda of the Special Meeting scheduled for August 14, 2017.
- Confirm the status of the definitive proxy statement filed with the SEC regarding the ratification of the Share Increase Amendment.
- Monitor filings with the Nevada Secretary of State to confirm the rescission of the Blank Check Preferred Amendment.
- Note that no shares have been issued in excess of the pre-amendment limit of 9,375,000 Common Stock shares pending the Special Meeting outcome.